Weakening buying activity suggests natural gas selling to 3.550

US natural gas prices stabilized after a 2% drop the day before, triggered by record crude production and expectations of warmer weather in the next two weeks. Lower heating demand is weighing on the market, as utilities may draw less gas from the storage facilities than usual for this time of year.

The market remains under pressure due to increasing output despite record liquefied natural gas (LNG) supplies. According to LSEG, natural gas production in 48 US states reached 104.6 billion cubic feet per day in February, recovering from January's decline caused by abnormally cold weather. This figure is in line with the historic high of December 2023.

Meteorologists forecast warm weather to persist until March 13, which may further reduce gas demand. According to LSEG estimates, average demand, including exports, will fall from 127.3 to 119.1 billion cubic feet per day next week.

The prospects for gas demand in Asia remain uncertain, as the region's largest economies are actively expanding coal-fired power generation. This could limit future growth in gas consumption.

On a technical level, natural gas price is in a short-term uptrend on the H4 timeframe. However, it was unable to continue rising as it hit a broken daily trend support (D1), which now serves as resistance. Currently, the price decline is restrained by the trend support on H4.

The Bulls Power indicator (standard parameters) points to weakening buying activity, with volumes below zero. 

Signal:

The short-term outlook for natural gas suggests selling. 

The target is at the level of 3.550.

Part of the profit should be taken near the level of 3.800.

A stop-loss could be placed at the level of 4.315.

The bearish trend is short-term, so a trading volume should not exceed 2% of your balance.